Julie Jason: Understanding family finances through six 'dates'

Last week, I talked about a wife's concern that her husband wasn't answering her questions about family finances. While a lack of communication on family finances is not unusual, there is a way to ignite interest and inspire confidence, and, more importantly, to secure the financial future of a wife who may someday become a widow.

It involves a process that builds communication over a series of six "dates," agreed-upon, one-hour meetings that are a break from the normal routine — a time to get together outside of mealtime. The dates start with a slow exploration on familiar ground, building to an examination of the important financial issues facing your family.

The rules of engagement are similar to negotiation techniques taught by the Program on Negotiation at the Harvard Law School.

The key ingredient is this: The person making the invitation — the husband, in this example — has to agree to this rule: Actively listen to your wife. Gather information. Make notes. Repeat what you heard to clarify understanding. Do not direct, cajole, dismiss or influence in any way.

Date One • Allow your spouse to express any and all concerns, questions, observations, complaints, fears and hopes for the future of the family. Your job is to listen actively. Take notes. If you don't understand something, ask questions. If you don't agree with something, make a note in order to be able to return to the issue at a later time.

If you have children, ask your wife to tell you her views on future weddings, education, gifts to enable a down payment on a home purchase and so on. If you have grandchildren, ask for views on paying for their education, paying for family vacations, whether each grandchild should be treated equally in your will and so on.

While these topics are not directly related to the household financial issues, in my experience, they will start the conversation. You will not decide anything at this point; just gather data. At the end of the hour, review notes and have your wife prioritize one to three topics of particular interest to return to later.

Date Two • Now it's the husband's turn to express his views and for the wife to take on the listener's role. She must be careful not to interject her opinions at this time. At the end, once again, arrive at a list of one to three topics of importance to the husband to review later.

Date Three • You and your spouse jointly gather all bank and brokerage statements for the most recent month. Organize the papers by the owner of the account, whether the owner is the husband, the wife, both jointly or a trust or other type of account, and whether the account is tax-deferred, such as an IRA. Together, create an index.

This exercise helps both spouses work together to organize financial matters, an important first step in working together as a team. Jointly make a list of any questions that arise.

Date Four • Pull together copies of all beneficiary designations, wills, trusts, powers of attorney, insurance policies, living wills and deeds. Again, this helps a couple learn to work as a unit. Expect to come up with questions that may need to be addressed with a lawyer or accountant.

Date Five • Together, work through your personal cash flows in order to answer these questions: How much are we spending now to keep up our current lifestyle? Where is the money coming from to pay for these expenses? How will our lifestyle needs change over time? Where will the cash come from to pay for additional expenses? Then, review your tax return together. What income and other tax obligations do we have now? How will those obligations change in the future?

Date Six • Together, prepare a list of lawyers, accountants, tax advisers, investment advisers, stockbrokers, insurance agents and any other experts who are currently part of your family's team. What are some of the discussion points? Are we happy with our investment objectives and results? Will future cash flows be covered? A natural discussion will come from working together on this list. If your spouse doesn't attend meetings with your advisers, now is the time to change that.

At the end of this process, conversations about family finances will flow more freely. You'll identify gaps in your plan that you need to address. And you'll help bring a sense of security to a spouse who may feel left out of family financial decision-making.

For more insight on how to hold these conversations, you'll want to get some ideas on communication. An interesting report, which you can download for free (www.pon.harvard.edu), is "Working Together Toward Conflict Resolution on the Job and at Home."

Julie Jason, a personal money manager (Jackson, Grant of Stamford, Conn.) and award-winning author, welcomes your questions/comments at readers@juliejason.com.